) -- Gold miners are seeing no evidence of a slowdown in China.
After China had explosive growth of 11.9% in the first quarter of 2010, the fear has been the country will take steps to curb spending which would decrease demand from everything from raw materials to electronics to gold.
In the second quarter, China's economy grew 10%. That had some analysts worrying that double-digit growth would force the government to take more money out of circulation while other analysts believed that the 2% slowdown quarter over quarter proved the economy was cooling too fast.
Gold producers at the Denver Gold Forum, however, said those fears were unfounded. The consensus is that China is growing at a gangbuster rate and will continue to be the largest gold producer and consumer in the world.
Although China has indicated that its central bank might not add any more gold to its reserves, it already has 1,054 tons, it has expanded the gold trading market, and is encouraging its citizens to own the physical metal. According to the World Gold Council, China's total gold demand increased 26% in the second quarter.
is the largest foreign player in China with three producing mines and one exploration project. The company plans to produce an estimated 360,000 ounces of gold from China in 2010. CEO Paul Wright says the slowdown rumors in the European and North American press are just funny.
"It's rather amusing ... I think the nature of China is that you will continue to see two steps forward and one step back but the one step back should never be confused with a lack of forward progress; it's just the style of progress in China."
Bill Biggar, CEO of
North American Palladium
, is also reporting no slowdown in China for palladium. China is the largest car manufacturer in the world and according to Biggar most of its engines are gas and made entirely with palladium as opposed to platinum, which is used in catalytic converters found more in Western countries.
"We think the growth
in China is going to continue. Whether it's going to be 9% growth in China or 7.5% who knows but directionally it's still substantial," he said.
Coeur D'Alene Mines
, a gold and silver producer in Mexico and Alaska, is also reporting strong demand from China. CEO Dennis Wheeler says the company just completed an agreement with state-owned
China National Gold Group
, the No. 1 gold producer in China. Under the agreement, Coeur D'Alene will give half of its gold concentrates from its new Kensington Mine in Alaska to the company.
Kensington is estimated to produce 50,000 ounces of gold in 2010 and average 125,000 ounces annually over the mine's 12.5 year lifespan. According to Coeur D'Alene's Web site, the company has already shipped two gold concentrate loads to the Chinese company.
When asked if Coeur D'Alene saw any signs of a slowdown in China, Wheeler said: "
China's slowing? Compared to what?"
Written by Alix Steel in Denver.
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